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Receiving deposits by individual

Sunny Saini (Individual) (29 Points)

25 December 2016

I am an individual (not a company) and I do Virtual Currency trading business. Currently I have invested my money only for the business but want to expand business by taking deposits from other people and giving them good profit share in return. Am I allowed to do this? If not then how can I expand my trading business of virtual currency?

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8 Replies

Naresh Bhatia (Professionals) (36 Points)
Replied 25 December 2016

better to form a company and make those persons as ur shareholders. u can take money and invest

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Sunny Saini (Individual) (29 Points)
Replied 25 December 2016

Thank you sir,

Can I make Pvt. Ltd Company with my wife?

Madhavi (Practice) (80 Points)
Replied 26 December 2016

Yes , Your wife can be another Director.. but please go through Deposit Rules.

Madhavi (Practice) (80 Points)
Replied 26 December 2016

Loans from Conditions, if any: 1.) Shareholder: Member: Yes, can accept, but subject to the condition specified in deposit Rules 2.) Director/Relatives of Director Yes, can accept, but the director/relative will give a Declaration in writing that money is not given out of borrowed funds and company will disclose it in the Board's report. 3.) Employee Yes, can accept up to the employee’s annual salary ( there should be a contract of employment with the company) in the nature of non- interest bearing security deposit. 4.) Any other Individual Can’t accept because it is prohibited by the definition of Private Company. 5.) Proprietorship Firm ; Can’t accept because it can’t be director, Member or relative of Director. 6.) HUF Can’t accept because it can’t be director, Member or relative of Director. 7.) Partnership Firm Can’t accept because it can’t be director, Member or relative of Director. 8.) Any Company Yes, can accept, but also comply with Sec 179(3) wherein the conditions are specified for the lender 9.) Banks Yes, can accept 10.) Trust Yes, can accept, but loan received should be non- interest bearing. 11.) Outside India Yes, can accept, but subject to the provisions of the Foreign Exchange Management Act, 1999 and rules and regulations made there under. 12.) Govt. organization ( eg. SIDBI) Yes, can accept 13.) Any other Financial Institution which are not incorporated as Banks (eg. Religare, Fullerton, Barclays, Bajaj Finance). Yes, can accept